Data analytics can single-handedly take a business to new success heights with improved customer experience and risk management. Find out more in this article.
In today's rapidly evolving business landscape, businesses are collecting a tremendous amount of data. From customer interaction and sales figures to social media marketing and website traffic, businesses have access to a wealth of data. As per IDC, the world's data is expected to reach 175 zettabytes by 2025. However, collecting a lot of data is not enough for businesses to drive growth. They need to turn the data into actionable insights by utilizing data analytics.
Considering the importance of data and the hidden valuable data insights, companies are investing heavily in data analytics. The global big data and business analytics (BDA) market was projected to grow by over $274 billion by 2022, a 27% increase from 2021. Moreover, the NewVantage Partners 2023 survey showed that 87.8% of organizations reported increased investment in data and analytics in 2022. When every company values data analytics as a crucial asset, it's important to look into how data analytics drive business growth. Therefore, this article discusses in detail what major roles data analytics play in business growth. So, let's jump right to it!
Data Analytics – A Quick Overview
Data analytics is a process that cleans, transforms, analyzes, and models large data sets to extract critical data insights. It utilizes advanced computational techniques, machine learning algorithms, and statistical data to thoroughly examine data sets, gather valuable insights, and find trends to draw conclusions.
With data analytics, businesses can shape their processes, improve decision-making, optimize marketing campaigns, and accelerate growth. It also helps to quickly identify and respond to emerging market trends and gain a competitive edge. Overall, data analytics is all about uplifting business performance.
Role of Data Analytics in Business Growth
Data analytics has become a crucial tool for businesses to synthesize data from a wide range of sources and deliver highly-valuable insights for effective business strategies. It makes a business future-ready by forecasting events and recognizing trends and opportunities.
Netflix is a perfect example of how data analytics can play a game-changing role. Netflix analyzed 3 million searches, 30 million daily plays, and over 4 million subscriber ratings to extract predictive analytics. Therefore, its thorough data analytics let the platform release many hit series, such as House of Cards. So, now let's dive deep into the crucial role of data analytics in business growth from four different perspectives:
- Informed Decisions
Data analytics empowers organizations to analyze large and varied data sets gathered from different sources. The analytics then helps gain insights about operational efficiencies, market trends, customer behavior, and other aspects. These insights then become resourceful material for making more informed decisions.
After surveying a range of businesses, BARC found that 69% of businesses cited better strategic decisions, 52% cited better customer understanding, and 54% cited improved control of operational processes after benefiting from big data analytics. Therefore, data analytics makes decision-making more efficient, which helps increase productivity and profitability, leading to tremendous success and business growth.
- Improved Customer Experience
In the current digitalized and tech-driven era, customer expectations and demands are in an ever-changing loop. Moreover, today customers have plenty of choices, making it very challenging for businesses to grab and retain customers. Therefore, businesses need deeper intelligence about customer behavior, preferences, and needs to convince and retain them. This is exactly what data analytics offers businesses.
By leveraging customer data, data analytics helps businesses get valuable perceptions about customer behavior and preferences, which leads to offering more personalized experiences to customers. According to the McKinsey survey, data-driven organizations are 23 times more likely to grab new customers and 6 times more likely to retain customers. Moreover, satisfied customers are seen to spend 140% more. All these aspects reflect that customer-specific data analytics can significantly improve customer experience and loyalty, leading to rapid business growth.
- Identifies New Growth Opportunities
There are always new growth opportunities businesses want to leverage for a competitive edge. Data analytics has been seen to be highly effective in identifying and leveraging new growth opportunities. Since businesses have access to plenty of data sources, such as sales data, customer interactions, market and economic conditions, and similar others, they can gain a deeper understanding of customer behavior and market trends and find potential growth opportunities.
Data analytics is getting widely used to analyze historical data to make future predictions, analyze customer feedback to identify patterns, and analyze different customer groups to understand behavioral patterns. In fact, 62% of retailers acknowledged that information and analytics are helping them attain a competitive advantage. In short, leveraging the power of data analytics rightfully can help businesses identify and capitalize on new growth opportunities.
- Enhanced Risk Management
Risks are everywhere in businesses, from customer/employee fraud and legal non-compliance to supply chain mismanagement, cyber-attacks, and many more. A business cannot expect long-lasting growth without comprehensive risk management. Data analytics can help businesses improve their risk management posture by taking timely preventive measures.
With data analytics, organizations can identify fraudulent activities based on real-time data, pinpoint potential security threats and vulnerabilities by analyzing system logs and network traffic, detect potential supply chain risks by analyzing logistics data, and do much more. Moreover, data analytics can also help prioritize risk based on profiling the risk in terms of likelihood and impact. In short, data analytics helps assess and manage risks timely before they become a survival threat to organizations.
In the wake of potential economic uncertainty, changing customer demands, and rapid technological advancements, data and data analytics have become essential business assets. From valuable insights and informed decisions to new growth opportunities, data analytics has a lot to offer. Therefore, it is crucial for all types of businesses to integrate data analytics and increase their investments with new data trends. To sum up, when used rightly, data analytics will lead to more value for money and help take businesses to new heights quickly.